Unraveling the impact of TOD on housing rental prices and implications on spatial planning: A comparative analysis of five Chinese megacities

Abstract

Transit Oriented Development (TOD), as a widely practiced planning strategy toward urban sustainability, commonly refers to the integration of transport and land use in the form of an integrated transit station area surrounded by compact urban development and high-quality walkable environment. Although policymakers are very enthusiastic about the potential of TOD in boosting the development of real estate market and livable neighborhoods, how TOD characteristics affect housing rental prices has not well been gauged with empirical data. Taking advantage of online housing platforms, this paper attempts to fill this gap through explicitly unraveling the impact of TOD on housing rental prices across five major Chinese megacities (Beijing, Shanghai, Shenzhen, Hangzhou and Wuhan). We first propose a conceptual framework to explain why and how TOD impacts housing rental prices. TODs are then delineated in the five megacities and T-test confirms that TOD housing properties present significant higher rental prices than non-TOD ones. Spatial hedonic modeling is employed to identify the relationship between TOD characteristics (e.g., metro station, neighborhood and synergy) and housing rental prices in each megacity, and the variable decomposition is further utilized to quantify their relative contribution. Regardless the variations among the five megacities, it is discovered that TOD characteristics generally account for 10%–20% of the housing rental prices and the TOD neighborhood presents the highest relative contribution. The synergy between the metro station and the neighborhood also plays an essential role. Metro station type rather than metro station proximity acts as a significant exploratory variable. These findings foreground that the essence of TOD lies in high-quality urban (neighborhood) development, which are often overlooked in previous studies that overemphasize the importance of “transit” (station) itself. Based on the identified TOD-generated housing rental premiums, we offer five recommendations for TOD practices to be integrated into China's territorial spatial planning. This study renews our understanding of the outcomes of TOD both conceptually and methodologically.